One of the most promising solutions to the UK's mounting waste problems is under threat after the Government set the price it will pay for electricity generated from organic waste too low, green campaigners claimed yesterday.

Farmers are aborting plans to build anaerobic digestion plants to convert animal slurries, manure and rotting vegetables into energy after the Government's climate change department made the proposed plants commercially unviable, according to the Renewable Energy Association (REA), which represents the industry.

The setback comes on the eve of a major "Energy Into Waste" conference taking place in London this week and raises question marks over the Government's commitment to increase the proportion of electricity from renewable sources from 5.5 per cent to 30 per cent by 2020.

David Collins, the REA's expert on anaerobic digestion, said: "All the momentum has been knocked out of the system. There just won't be any plants built unless they are supported commercially... [but] the new tariffs are not high enough to support any of the small plants."

A separate government department had hoped Britain could build 1,000 anaerobic digestion plants by 2020, but this target now looks unlikely to be met, campaigners added.